NDI Director on The Defence Modernisation Programme

On Thursday 25th January, the Secretary of State for Defence, Gavin Williamson MP, announced a new programme of work to modernise UK defence that is sure to have significant implications for UK defence manufacturers. This confirmed recent speculation that the high-level findings of the National Security Capability Review (NSCR), conducted by the National Security Council over the past six months, has concluded that its defence component should be taken forward separately. In what is being seen as a victory for Mr Williamson over the Treasury, this dislocates defence from the NSCR, commissioned explicitly to be fiscally neutral, and should provide UK industry with hope that the Government will now commit, as a minimum, to delivering the equipment and capabilities promised to the armed forces in the 2015 Strategic Defence and Security Review even if this requires a budget uplift. Industry can therefore look forward with less trepidation than previously about the conclusions that might be drawn and what this might mean for future investment in UK defence. That certainly seems to be Mr Williamson’s objective, who has been relatively bullish on this point. Nevertheless we should not yet rule out a showdown with a supposedly skeptical Chancellor ahead of the anticipated July publication date.

It is nevertheless evident from the programme of work announced, that MOD is still committed to driving significant efficiencies into departmental processes and operations and that this is no small task. The review will be divided into four strands of work, the first three will consider how MOD is organised, which will include an ‘aggressive’ programme of business modernisation, and ‘improved’ commercial and industrial performance, with no doubt significant implications for MOD’s contractors that will filter down the supply chain. The fourth strand will consider the capabilities the armed forces need to meet the UK’s three national security objectives and may yet revise – on military grounds – those requirements set out in 2015. To this end Mr Williamson spoke of both strengthening capabilities in priority areas, but reduce resources elsewhere.​

It was important that Mr Williamson reinforced the commitment to delivering defence’s contribution to national prosperity and, promising a process of consultation as part of the programme, EEF and NDI will be sure to intervene on behalf of our members and UK manufacturing more widely, to make sure that the true value of our sector to the national economy is not lost to MOD parochialism when value for money judgements around investment decisions are being taken. This simply won’t be possible if the review is established with a requirement that prevents a budget that increases in line with the evolvingnature of the security threat our country faces. The Government must heed the words of Sir Michael Fallon MP, speaking from his uniquely privileged position having served as Defence Secretary until as recently as November last year, when he warned the House of Commons that ‘…the words used here are interesting and important, but what really matters in the end is money—more money.’